Correlation Between Imed Infinity and Satcom Systems
Can any of the company-specific risk be diversified away by investing in both Imed Infinity and Satcom Systems at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Imed Infinity and Satcom Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imed Infinity Medical Limited and Satcom Systems, you can compare the effects of market volatilities on Imed Infinity and Satcom Systems and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Imed Infinity with a short position of Satcom Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imed Infinity and Satcom Systems.
Diversification Opportunities for Imed Infinity and Satcom Systems
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Imed and Satcom is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Imed Infinity Medical Limited and Satcom Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Satcom Systems and Imed Infinity is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Imed Infinity Medical Limited are associated (or correlated) with Satcom Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Satcom Systems has no effect on the direction of Imed Infinity i.e., Imed Infinity and Satcom Systems go up and down completely randomly.
Pair Corralation between Imed Infinity and Satcom Systems
Assuming the 90 days trading horizon Imed Infinity Medical Limited is expected to generate 1.08 times more return on investment than Satcom Systems. However, Imed Infinity is 1.08 times more volatile than Satcom Systems. It trades about 0.09 of its potential returns per unit of risk. Satcom Systems is currently generating about 0.08 per unit of risk. If you would invest 6,160 in Imed Infinity Medical Limited on September 1, 2024 and sell it today you would earn a total of 3,780 from holding Imed Infinity Medical Limited or generate 61.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Imed Infinity Medical Limited vs. Satcom Systems
Performance |
| Timeline |
| Imed Infinity Medical |
| Satcom Systems |
Imed Infinity and Satcom Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imed Infinity and Satcom Systems
The main advantage of trading using opposite Imed Infinity and Satcom Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imed Infinity position performs unexpectedly, Satcom Systems can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Satcom Systems will offset losses from the drop in Satcom Systems' long position.| Imed Infinity vs. ICL Israel Chemicals | Imed Infinity vs. Abra Information Technologies | Imed Infinity vs. Dan Hotels | Imed Infinity vs. Altshuler Shaham Financial |
| Satcom Systems vs. Azorim Investment Development | Satcom Systems vs. Blender Financial Technologies | Satcom Systems vs. IDI Insurance | Satcom Systems vs. Bank Leumi Le Israel |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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